Updated: 29 March 2020
The Federal Government will provide a guarantee of 50% to Small to Medium Business (SME) lenders for new unsecured loans of up to $250,000 to be used for working capital.
SMEs with a turnover of up to $50 million.
How do I get it?
The scheme will commence the day after royal assent until 30 September 2020 and will be provided through participating lenders. The guarantee will apply to loans under the following terms;
- Maximum loan of $250,000 per borrower;
- For a period of up to 3 years, with an initial 6 month repayment holiday; and
- The loans will be unsecured.
Who should use this stimulus/other considerations?
Any SMEs requiring a working capital injection. All loans will still be subject to the participating lenders usual credit assessment processes but the Government expects lenders to sensibly take into account the current economic conditions. The Government is also encouraging lenders to provide draw down loans so interest is only paid when funds are utilised.
The guarantee is to apply to new loans, but loans made after the Government announcement but before the commencement date (early April 2020) may also be covered.
The Government is moving quickly and things are changing daily with regards to the response to COVID-19.
Should you have any queries regarding this measure or any Government measure announced in relation to COVID-19, please contact our office for more information.
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The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.